You need to know this:

• IAG CMO Brent Smart questions the sanity of any marketer spending less than 50 per cent of their budget on media
• Smart is “not the anti martech guy” and says blend of art and science key to building brands – but wants to spend more on brand
• Has “dramatically dialled down” on programmatic retargeting following a control group exercise
• IAG already weights spend 65:35 brand to performance – but Smart says Binet and Field data suggests optimal ratio for financial services is 80:20
• Smart’s running a two year experiment in one region to prove Binet and Field ‘excess share of voice’ theory
• Will spend above market share and only on brand. KPIs will be customer numbers
• Smart says The Monkey’s NRMA repositioning work is already driving sales
• “I think a lot of agencies have lost confidence in the ability of creativity to drive brand. It does” - The Monkey’s CEO Mark Green
• “Clients can be quite fearful of actually allowing creativity to flourish. But that's where the best clients step up” – Mark Green

Gartner reckons 29 per cent of marketers budgets are now spent on martech - more than agencies at 23 per cent and more than paid media, also 23 per cent.

 “That’s insane,” says IAG chief marketer, Brent Smart.

“One of my most important principles is that 50 per cent of what we spend has to go to the customer in terms of media and building the brand. It's insane to have anything that's a bigger percentage of your budget than media.”

He also gives short shrift to the notion of “non-working dollars”.

“Marketers talk about agency fees and production being ‘non-working dollars’. That is the biggest misnomer in marketing. They are the hardest working dollars you can have. They are the people creating the stuff that touches the consumer, the stuff that builds the brand.”

Not the ‘anti martech guy’

After last month’s skewering of those investing in martech over creativity, Smart insists he is “not the anti-martech guy”.

There’s a lot of “amazing” tech, he says, “but what it doesn’t do is build brands”.

“For me it’s really simple: all that matters is what touches the customer. That's what we have to prioritise - because that's what builds brands, that's what leads to sales.”

On the flip side, Smart points out that technology can underpin creativity and enable stronger brand building as well as performance.

“I get painted as the guy who is anti martech and all about brand. But you need to understand when to art and when to science - and you need both.”

Learning from IAG’s 'martechies'

Rather than indoctrinating new IAG marketers on the gospel of brand over performance and tech, Smart says it’s the other way around.

“Technology is moving so fast that I would say they spend more time educating us on what's changing, what's possible. Because they are absolute experts, awesome at what they do - and I respect them enormously.”

Smart says it is critical to have a full suite of expertise within a marketing function: “I've never met one marketer or one agency person who's great at everything.” Breaking down siloes within multidiscipline teams enables them to work on “a bigger vision and a bigger idea,” says Smart.

“When you get technologists and data people, brand marketers and social experts in the same room, that’s when it gets exciting. I’m a brand guy but I rely heavily on fantastic technical experts at our place who know way more about search, martech and programmatic than I ever will – and I really respect their expertise,” says Smart.

“But what I try to do is show them that there’s actually a bigger vision that we are all working towards – a brand that we’re all building together.”

Using tech to justify creative investment

Mark Green, The Monkeys group CEO and co-founder, says marketers are “starting to recognise [the need for] that combination of art and science” and that the martech aspect can ensure customer experience delivers on brand promise.

Green says analytics can also unearth and address problems on the brand side. He cites Telstra as an example:

“As the brand guys we’re always highlighting the importance of investing in brand - and we had this hypothesis that there were too many retail messages in market.”

Green says Monkey’s parent company Accenture Interactive’s analytics were able to prove that “there were too many retail messages for a customer to be able to understand what was being offered at any one time”.

That enabled the decision to “reinvest in the brand and the network” and to “redeploy in a way that actually builds a brand with the creativity to drive it well – and it’s delivering great results.”

Busting retargeting and attribution myths

Applying science doesn’t necessarily require lots of martech, Smart suggests. He cites a “pretty simple control group experiment” as the driver to “dramatically dial down” programmatic retargeting.

“We served retargeted programmatic to one group of customers and we didn’t serve it to another,” he says.

“If we had used the attribution models that certain people use they would have told us that we sold a couple of thousand policies to the group we retargeted. But then we looked at the control group with no retargeting – and we sold 26 more policies to them.”

While  retargeting makes sense in other retail categories, Smart says that was a “pretty simple exercise to show that a retargeted display ad in a category like insurance is not going to tip you into a sale”.

He says that kind of approach also shines a light on dodgy attribution models.

“You need to set up control groups and be really clear on the impact display is having. It’s very easy to make it look good through different attribution models. I think often we don’t apply common sense to things.

“Are you really telling me that someone took out a several thousand dollar insurance policy because of a banner that touched them on the way through? I don’t think so.”

Applying creativity to the CX playbook

“We all work with lots of consultants and we are all doing very similar things: Mapping the customer journey, the classic  ‘CX playbook’,” says Smart.

“What’s exciting about working with Accenture and The Monkeys is the ability to take all that robust, data-driven work that Accenture can do and then put a creative filter on it.

“We still do 30-second ads, we still do posters and that is what agencies are really good at: taking all that information, all that complexity and boiling it down to the simple element that really matters.

“So for me, that one-two punch of Accenture and the Monkeys becomes really powerful.”

Proving Binet and Field for real

Smart’s “a real disciple of the Binet and Field school” and their theories around excess share of voice, or ESOV.

Binet and Field suggest an ideal marketing ratio is weighted 60:40 brand to performance.  Smart says IAG is above that at 65:35, but he wants to go higher.

“Binet and Field say that in financial services, you should be 80:20. If you dig into Binet and Field data, the category that has lost the most effectiveness in the last decade is financial services,” says Smart. “It’s also the category that has shifted the most [spend] into short term activations versus brand – and it has seen the biggest drop off. I think that is pretty telling.”

So Smart is aiming to prove that in the real world.

“It’s commonly held wisdom that if your share of voice is above your market share, you will grow” and vice-versa, says Smart. But with a market leading brand like NRMA, it’s “pretty challenging” to attempt to prove that theory in a bid to grow market share.

“It would take tens of millions of dollars,” says Smart.

Instead, NRMA has committed to over-index on brand in one region for two years – and the metric of success will be sales.

“We’ve found one region where we are going to spend above our market share and run only brand message, nothing else,” says Smart.

“The control group will be the rest of New South Wales where we will just keep doing what we do – the current levels of media spend and creative mix.

“At the end of the two year period, we’re hoping to show that we can uplift in that region and prove the theory that spending above your market share and building brand over the long-term will indeed deliver commercial outcomes.”

Sales the only metric

Smart says measuring success in terms of customer numbers keeps it simple.

“In the end, there are all sorts of metrics we can look at as marketers. But what matters most is: are you adding more customers? In our business, that is the metric that counts above all else,” says Smart, adding that NRMA is adding customers “for the first time in seven years.” 

That suggests NRMA’s repositioning work is already delivering results, says The Monkey’s Mark Green, and helps counter the idea that brand doesn’t lead to sales.

“I think a lot of agencies have lost confidence in the ability of creativity to drive brand.  It does – and even more so when you are brave with the message and use creativity in a compelling way,” says Green. “At the moment, more differentiated [messaging] is more likely to have an impact.

“So there's the brand and retail question and the media mix conversation, but the emphasis on the message - what you're actually talking about - makes a big difference and can lead to immediate sales impact.”

Sales uplift favours the bold

The bolder the campaign, the bigger the results, says Green. That requires not just brave marketers, but boardrooms with backbone.

MLA is one client reaping the rewards of holding its nerve, says Green.

“We always start with what's going to make the biggest impact with a customer, what's going to make a dent in the universe and how much money have we got to spend to do that,” Green explains.

“When you look at it like that, you take the channels out of it and get to the customer with a message.” Creativity is a “big part” of determining how to do that, he adds.

“With the MLA Australia Day campaign, it’s mostly seen by people at work, it’s viral. There’s a bit of paid media behind it on TV, but it’s mostly connecting through digital video - and it is designed to be provocative enough to get people talking about it,” says Green.

“Now that's not a channel mix conversation, it’s an impact conversation - using creativity to drive engagement, drive awareness, drive response. And we get the biggest response in marketing every year when we do that.”

So why are there so many timid campaigns?

If that’s the case, why aren’t more marketers taking some risk for bigger returns, given the pressure most are under to deliver or get punted in under three years? Green thinks the tide is starting to turn.

“We're having more conversations with clients that are willing to do that, that are coming to us for work that earns its unfair share of media. That's what the best clients that we work with are asking for.”

He says there is always the “meat and two veg” of “production and the media channels all working together with the martech underpinning it”.

“But the piece that is intangible, that can set it alight, is the creativity and brilliant idea that hits the zeitgeist and gets people talking.”

In the digital age, that is the critical aspect of advertising and marketing, says Green.

“The customer will decide whether they engage with your work or not. And the more impactful and interesting it is, the more likely that it's going to make everything work.”

Bravery in the face of ‘killer’ corporations

Smart and Green say the reason more marketers are not taking risks is twofold: The fear of flak and the fear of failure.

“The reason we don’t see more creative work is that it is not easy.  If it was, everyone would be doing it. You have to really sweat the craft,” says Smart.

“And you have to be brave actually getting to that world as well,” says Green. “A lot of clients aren’t comfortable pushing it out there like that.”

Marketers have to defend those decisions says Smart, “because I think corporations are almost perfectly designed to kill an idea. You’ve got to protect these ideas, shepherd them through the organisation. It takes constant vigilance”.

Green says the “best clients” step up to that challenge, “not only backing up creative work in the first place, but when Twitter explodes, they wear it and bat for it internally to make sure people stay the course.”

“Everybody has a point of view on work these days. I think that scares a lot of clients into just dealing with the stuff that they can be certain of; that's less likely to be criticised.  Clients can be quite fearful of actually allowing creativity to flourish - but that's where the best clients step up.”

The final word: Even tech giants turn to brand

Green and Smart suggest that the greatest examples of the symbiotic yet pendulous relationship between tech and brand are the tech giants themselves.

“Apple is the greatest technology company on the planet – and of their trillion dollar valuation, $300bn is the value of their brand,” says Smart.

“Facebook suddenly runs into reputation issues, to what do they turn to fix it?" says Smart. “Brand. So it’s interesting. The great technology companies of our time have all realised that product gets you so far – and let’s face it, it’s got them to extraordinary places – but now as they are maturing, they’re all turning to brand.”

Green agrees.

“Same with Uber. Reputational challenges mean they are having to reinvest in the customer and brand," he says.

"Technology has obviously changed everything. But we're now at the point where, if it’s actually going to be beneficial to the customer, we need to bring both aspects together.”